Forward Open Market Committee was inclined to keep interest rates low
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Mumbai: The Sensex soared to 427 points in the latter half of trade on news that the minutes of the US Fed’s Forward Open Market Committee (FOMC) revealed that it was inclined to keep interest rates low for a longer time. The Sensex stamped out it’s three-day losing streak to close at 26,637.28 up 390.49 points while the Nifty gained 117.85 points to close at 7,980.55.
Analyst Ambareesh Baliga, said that the markets saw a robust bounce back after days of negative trading last week due to FII selling.
For the Nifty the crucial level is 7,800-7,850 and if it cracks this level it could easily come down 400 points, he said. The next trigger for the markets he said was if the BJP won in Maharashtra and Haryana.
“The earnings season does not promise much because the markets have already discounted the FMCG, IT and Pharma stocks and most other stocks are already priced in,” he said.
While markets opened positive on the Fed’s soft statement, it went up further mainly because of strength in cyclical stocks/sectors like banks, metals, infrastructure and capital goods, said Shrikant Chouhan, Kotak Securities.
“The new economy sectors/defensive sectors remained under pressure of profit taking but we feel it’s a healthy signal for the market. We are of the view that next 3 months will be the months of cyclicals to perform and in that if indices breaks 8,180/27,355 along with the participation of cyclical stocks then the Nifty can easily move to 8,500 or 8,600 by the end of December 2014, “ he said.
Friday would be a crucial day for the markets as corporate earnings of the big companies may kick start with the IT major Infosys.
( Source : dc correspondent )
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